Two perfectly competitive firms, Firm A and Firm B, both face random demand and have the same expected marginal revenue, as illustrated in the figure below. For which firm would a forecast of demand be more valuable?





A) Firm A

B) Firm B

C) The value for each firm is the same because the expected marginal revenue and marginal cost are the same.

D) A forecast is more valuable for Firm A if the demand will be high and more valuable for Firm B if the demand will be low.


A) Firm A

Economics

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